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- DOW Soars; FDIC Chair Grilled On Workplace Culture
DOW Soars; FDIC Chair Grilled On Workplace Culture
FINRA On Insider Trading; A Detailed View of Regulatory Reporting for Financial Firms
Naeem Qasim
May 17, 2024
Hello Everyone, I hope you are having a great week. Let’s dive into the Risk Queue!
-Thank you, Naeem, CEO & Founder - Risk On Q
“We Manage the Risks So That We Can See the Benefits”
PICKS
People Risk Overlooked - FDIC faces tough questioning on workplace culture.
AI Bills- Senators’ AI Roadmap
FINRA- Fascinating discussion on insider trading
Regulatory Reporting - A detailed view
Risk Headlines
Stock Market: Dow Touches 40,000 As Stocks Hover At Record Highs - source cnbc.com
Key Points:
The strong performance of the stock market, with the Dow Jones Industrial Average surpassing 40,000 for the first time. This rally is attributed to several factors, including expectations of interest rate cuts, enthusiasm around artificial intelligence, and strong earnings reports from key companies across various sectors. Companies must remain agile and adapt their strategies to capitalize on the current market sentiment while managing potential downside risks.
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Bipartisan Congressional Grilling of FDIC Chair On Agency’s Workplace Failings - source youtube.com
Key Points:
There are concerns about workplace culture and misconduct at the FDIC, with calls for the resignation of the chairman and a focus on addressing harassment and discrimination issues. The toxic workplace culture at the FDIC included sexual harassment, racial discrimination, and abusive behavior by senior leaders including the chairman. The FDIC requires a substantial overhaul of their people risk management processes as this reports highlights the importance of fostering an inclusive, respectful and accountable workplace culture.
A.I. Risk / Technology Risk
Group of Senators Unveil Long-Awaited Guidance on AI Bills - source politico.com
Key Points:
A bipartisan group of Senators has released a roadmap for AI legislation aimed at promoting innovation, mitigating risks, and ensuring U.S. leadership in this transformative technology. The roadmap outlines key areas where Congress can act to provide critical funding for AI research and development, assess and address risks, and create a regulatory environment that enables all to leverage AI responsibly.
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Wall Street Journal Survey Risk & Compliance Professionals: Cybersecurity Tops List of Growing Risks - source wsj.com
Key Points:
The survey of compliance professionals highlights the multitude of risks facing businesses, with a focus on cybersecurity, regulatory compliance, geopolitical events, and AI adoption in compliance. The significant increase in cybersecurity threats, particularly for midsize companies, underscores the critical need for robust data protection measures. Failure to adequately address these threats can result in financial losses, reputational damage, and loss of customer trust. Moreover, the heightened regulatory scrutiny and enforcement emphasize the importance of maintaining a strong compliance program. These key risks demand attention from leadership to ensure organizational resilience and success in an increasingly volatile business environment.
Regulatory News - Fines, Losses, & Rules
FINRA Vital Role in Enduring Market Integrity- Insider Trading Detection - source finra.org
Key Points:
This podcast provides an enlightening look at FINRA's critical role in combating insider trading. By monitoring all trades in U.S. markets and leveraging advanced data analytics, FINRA can identify suspicious patterns and make connections that individual firms may overlook. This comprehensive surveillance serves as an important backstop for preserving market integrity.
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Financial Reporting Council (FRC) Fines PwC and EY Over Audit Failures - source theguardian.com
Key Points:
The LC&F scandal serves as a stark reminder of the crucial role that auditors play in safeguarding the integrity of the financial system. The failure of PwC and EY to adequately scrutinize LC&F's business practices resulted in substantial financial losses for investors and significant reputational damage for the auditing firms.
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PCAOB Adopts Tighter Rules on Auditors’ Quality Control - source wsj.com
Key Points:
The PCAOB's new rules represent a major overhaul of its approach to overseeing the audit profession. The shift to a risk-based framework for quality controls and the addition of annual reporting requirements and independent monitors signals that the PCAOB felt its previous oversight regime was inadequate. The underlying significance of these changes is a major shift in the PCAOB's approach to regulating auditors.
Risk Data to Geek Out On
A Comprehensive Look At Financial Firms’ Reporting Requirements Across Multiple Regulatory Agencies - source RiskOnQ.com
Key Points:
We have compiled a comprehensive table of the key regulatory reporting requirements for banks and financial institutions in the United States. This document is an essential resource for staying informed about the various reports that must be submitted to regulatory agencies. This consist of a wide range of report types, from financial statements and risk assessments to stress tests and liquidity monitoring.
The table provides a clear and concise overview of each report, including:
Regulatory agency responsible for the report
Report name and category
Description and purpose of the report
Reporting frequency and submission deadlines
By familiarizing yourself with this information, you can ensure that your organization remains compliant with all relevant reporting obligations, avoiding costly penalties and maintaining a strong reputation in the industry. Additionally, understanding these reporting requirements can help you identify areas where your organization may need to improve its data collection, management, and reporting processes.
Financial Reporting | Description | Frequency |
FRB Reporting | ||
FR Y-9C | Consolidated financial statements for bank holding companies | Quarterly |
FR Y-11 | Financial statements of U.S. nonbank subsidiaries of U.S. bank holding companies | Quarterly, Annually |
FR Y-12 | Consolidated holding company report of equity investments in nonfinancial companies | Quarterly |
FR 2052a | Complex institution liquidity monitoring report | Monthly, Each business day |
OCC Reporting | ||
Consolidated Reports of Condition and Income (Call Reports) | Quarterly financial statements for national banks and federal savings associations | Quarterly |
Uniform Bank Performance Report (UBPR) | Analytical tool that shows the impact of management decisions and economic conditions on a bank's performance | Quarterly |
FDIC Reporting | ||
Consolidated Reports of Condition and Income (Call Reports) | Quarterly financial statements for FDIC-insured institutions | Quarterly |
Summary of Deposits (SOD) | Annual survey of branch office deposits for FDIC-insured institutions | Annually |
FINRA Reporting | ||
FOCUS Report (Financial and Operational Combined Uniform Single Report) | Monthly or quarterly report of financial and operational information | Monthly, Quarterly |
Form Custody | Quarterly report on custody practices and verification of assets | Quarterly |
SSOI (Supplemental Statement of Income) | Quarterly report providing more detailed information on revenues and expenses | Quarterly |
NFA Reporting | ||
Form 1-FR-FCM | Monthly or semi-monthly financial report for futures commission merchants (FCMs) | Monthly, Semi-monthly |
Form 1-FR-IB | Semi-annual financial report for introducing brokers (IBs) | Semi-annually |
Form PQR | Quarterly or annual report for commodity pool operators (CPOs) on pool assets, subscriptions, and redemptions | Quarterly, Annually |
SEC Reporting | ||
Form 10-K | Annual report providing a comprehensive overview of the company's business and financial condition | Annually |
Form 10-Q | Quarterly report providing a continuing view of the company's financial position | Quarterly |
Form 8-K | Current report announcing major events that shareholders should know about | As needed |
Schedule 13D | Beneficial ownership report for individuals acquiring 5% or more of a company's shares | Within 10 days of acquiring 5% stake |
Form 13F | Quarterly report of equity holdings by institutional investment managers | Quarterly |
CFTC Reporting | ||
Form 40 | Statement of reporting trader | As requested by CFTC |
Form 102 | Identification of "special accounts" for futures commission merchants, clearing members, and foreign brokers | As required |
Financial Reporting | ||
Call Reports (FFIEC 031, 041) | Quarterly financial statements filed with the FDIC, FRB, and OCC | Quarterly |
FR Y-9C | Quarterly financial statements for bank holding companies filed with the FRB | Quarterly |
FR Y-8 | Quarterly report on transactions between a bank holding company's insured depository institutions and their affiliates | Quarterly |
Capital and Liquidity | ||
CCAR (Comprehensive Capital Analysis and Review) | Annual stress testing and capital planning exercise conducted by the FRB | Annually |
DFAST (Dodd-Frank Act Stress Tests) | Annual and semi-annual stress tests required by the Dodd-Frank Act | Annually, Semi-annually |
LCR (Liquidity Coverage Ratio) | Measures short-term liquidity resilience, reported monthly to the FRB, FDIC, and OCC | Monthly |
NSFR (Net Stable Funding Ratio) | Measures long-term funding stability, reported quarterly to the FRB, FDIC, and OCC | Quarterly |
FR 2052b (Liquidity Monitoring Report) | Monthly report on selected assets and liabilities for U.S. bank holding companies and foreign banking organizations | Monthly |
Risk Reporting | ||
FFIEC 102 (Market Risk Regulatory Report) | Quarterly report on market risk exposures and risk-weighted assets | Quarterly |
FR Y-14 (Capital Assessments and Stress Testing) | Series of reports on various risk exposures, submitted to the FRB | Monthly, Quarterly, Semi-annually, Annually |
Pillar 3 Disclosures | Quarterly and annual disclosures on risk management, capital adequacy, and risk exposures | Quarterly, Annually |
FFIEC 009a (Country Exposure Information Report for U.S. Branches and Agencies of Foreign Banks) | Quarterly report on foreign country exposures for U.S. branches and agencies of foreign banks | Quarterly |
FFIEC 018 (International Exposures of U.S. Banks and Their Domestic Customers) | Quarterly report on international exposures of U.S. banks and their domestic customers | Quarterly |
Resolution Planning | ||
Recovery Plan | Detailed plan on how the bank would respond to financial stress, submitted annually to regulators | Annually |
Resolution Plan (Living Will) | Plan for the bank's rapid and orderly resolution in the event of failure, submitted annually to the FDIC and FRB | Annually |
Other Key Reports | ||
FR Y-15 (Banking Organization Systemic Risk Report) | Quarterly report on systemic risk indicators, submitted to the FRB | Quarterly |
FFIEC 009 (Country Exposure Report) | Quarterly report on foreign country exposures, filed with the FFIEC | Quarterly |
Suspicious Activity Reports (SARs) | Reports on suspicious activities related to potential money laundering or terrorist financing, filed with FinCEN | As needed |
FR 2052a (Complex Institution Liquidity Monitoring Report) | Daily or monthly report on liquidity risk, submitted to the FRB | Daily, Monthly |
FFIEC 016 (Annual Dodd-Frank Act Company-Run Stress Test Report) | Annual report on stress test results for banks with total consolidated assets between $10 billion and $50 billion | Annually |
FFIEC 101 (Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework) | Quarterly report on regulatory capital for banks subject to the advanced approaches capital framework | Quarterly |
FFIEC 019 (Country Exposure Information Report) | Quarterly report on exposure to foreign countries, filed with the FFIEC | Quarterly |
FFIEC 030 (Foreign Branch Report of Condition) | Annual report on the financial condition of foreign branches, filed with the FFIEC | Annually |
FFIEC 031 (Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices) | Quarterly financial statements for banks with both domestic and foreign offices | Quarterly |
FR Y-11 (Financial Statements of U.S. Nonbank Subsidiaries of U.S. Holding Companies) | Quarterly or annual financial statements for U.S. nonbank subsidiaries of U.S. holding companies | Quarterly, Annually |
FR Y-12 (Consolidated Holding Company Report of Equity Investments in Non-financial Companies) | Quarterly report on equity investments in non-financial companies | Quarterly |
FR Y-7Q (Capital and Asset Report for Foreign Banking Organizations) | Quarterly report on capital and assets for foreign banking organizations | Quarterly |
FDIC 6200/06 (Consolidated Reports of Condition and Income) | Quarterly financial statements for FDIC-insured banks | Quarterly |
FFIEC 002 (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks) | Quarterly financial statements for U.S. branches and agencies of foreign banks | Quarterly |
FFIEC 004 (Report on Indebtedness of Executive Officers and Principal Shareholders and their Related Interests to Correspondent Banks) | Annual report on loans to executive officers, directors, and principal shareholders |
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Thank you for reading,
Naeem
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